When you initiate a return ebay is automatically "involved". Don't communicate, or do anything outside of ebay during the process.
There is a difference between "as new" and as "new". I don't see the ebay link, so it's unclear as to the exact wording in the listing. If the seller is calling it "new", then he would have to be an authorized Fender dealer and it would come with a factory warranty. Describing it "as new" can mean almost anything.
Be sure to include your pics of the damage to ebay. They'll compare them to the auction pics, and decide. Btw, that damage at the neck pocket isn't going to "buff out".
Unless things have changed recently, Paypal will reimburse your return shipping costs and will even sell you a prepaid shipping label for a few bucks (I think I paid $3 for their label last time I did it). Your refund will include the shipping that you originally paid to the seller (if any). The janky seller eats his shipping costs and hopefully is discouraged from misrepresenting items in the future.
If this was Reverb.com, the seller would have a golden opportunity to shaft you for all the shipping costs, even if a refund is granted. Reverb stresses their Sellers Protection Policy, while ebay stresses their Buyers Protection Policy. The significance of the two approaches should be obvious. I learned this lesson a few months ago with a crooked Reverb seller who lied about the condition of a bass. Seller granted me a return with refund, but he was able to keep the $50 shipping I paid him.
I questioned Reverb about this....they said the seller had disputed the damage and had provided them with a "video" that showed the neck to be in perfect condition. And Reverb said that "in cases like this, the seller is not obligated to reimburse any shipping costs." (wait...really? Seller rips me off then keeps the original shipping fee?)
Then, I contacted Paypal about at least getting my $71 return shipping cost back, which they've always done for me in the past with bad ebay sellers. Paypal said that because it was through a non-affiliated vendor (Reverb) my return shipping was not covered under their return shipping policy. This has to be due to the fact that Paypal IS eBay, and vice versa. Big difference. In the end, I lost $121 in two-way shipping costs over a $400 bass.
Naturally, I left the seller a negative feedback for his chicanery. Remarkably, a couple weeks later I noticed Reverb removed that negative feedback from the seller's feedback history. Evidently, these are the lengths Reverb will go to in shielding their sellers, even the bad ones. This type of behavior is a dog whistle for unscrupulous sellers.
To their credit, Reverb did subsequently allow me a $50 gift certificate to apply to a future purchase there after I complained enough about it. I applied that $50 credit to a pedal that I didn't need, but I wanted to at least get get something back out of the whole debacle.
I'll be hard pressed to buy anything else off Reverb ever again.
(rant over, do carry on)